Finally, Kuwait’s fourth oil refinery on its way.

AFTER waiting for more than ten years and obtaining all necessary approvals, Kuwait has finally signed the contract worth $15 billion for building Al-Zour Refinery by the end of 2019.

Finally, another mega oil project has been approved and is on-stream for completion. It is very important that the construction of the new refinery progresses, as it was postponed more than once. Now that it is on, it is a huge indication that Kuwait is serious about completing its outstanding projects and has finally realized it is time to move forward.


The new refinery is expected to become fully operational by the end of year 2020 with three local refineries of total capacity exceeding 1.2 million barrels per day after closing down Shuaiba Refinery and turning it into an oil terminal.

Therefore, the total refining capacity of Kuwait will be close to 2 million barrels inside and outside Kuwait including the refineries in Italy and Vietnam.

It will be an ideal strategy for Kuwait to secure 50 percent of its investments for ensuring a long-term safe outlet while the remaining 50 percent can be sold on long and short term basis without any fear of finding future homes for its hydrocarbon unlike its counterparts in the Gulf region and in OPEC.

For a long time, precisely since 1983, the Kuwaiti oil policy has been based on clear vision and long-term strategy. It has been looking for safe homes for its crude oil by buying refineries and obtaining long-term markets globally. Kuwait has a unique policy based on which it has always avoided direct, severe and head-on competition. Its strategy is working, which is evident from the size of its operations in some countries in Europe and Asia.

It is certainly good news for the oil industry to witness the implementation of its strategy and its movement in the right direction, with the policy of 50 percent refining to add value to the price of its crude oil.


At this early stage, it is not important to look only at the economics of refining but we must also consider the viewpoint of the state about having a new refinery. It should be regarded as a vehicle for ensuring security and job opportunities and for training and developing young engineers, operators and handymen. This is what the state needs, instead of considering the return on investments as the only tool and yardstick.

It is indeed good news for the industry as a whole including the commercial arena, traders and small businesses. We must remember that mega projects lead to smaller projects due to which everyone will have work and the commercial activities will be revived. The cash, which will amount to more than $25 billion after taking into account the other refinery project, should be directed to different commercial projects.

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